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Monday, March 12, 2012

Market Summary -- 12th Mar 12

FTSE STI closed 2,962.18, down 0.97 points or -0.03% with a total volume of 1.13b and a total value of S$865M. Total number of advance vs decline was 155 vs 210. Of the 30 component index stocks, 12 closed positive, 12 closed negative and 6 remained unchanged. The top 5 gainer component stocks were :-

1. JSH 500US$ +0.290

2. SIA Engg +0.070

3. StarHub +0.060

4. SembCorp +0.040

5. F&N +0.030

5. GLP +0.030

5. KepCorp +0.030

5. SIA +0.030

The top 5 loser component stocks were :-

1. JMH 400US$ -0.530

2. Jardine C&C -0.450

3. CityDev -0.160

4. HKLand US$ -0.080

5. SGX -0.040

US markets closed positive last Friday with a better than expected payroll number and unemployment rate maintained at 8.3%. The pared off some gain later part of the trading hours after ISDA ruled Greece debt swap as a credit event ie Default. Over the weekend, China announced a larger than expected trade deficit and signaling economy is slowing down. Asian bourses basically got nothing to cheer about despite private investors agreed on the Greece debt swap taking a 53.5% haircut. Nikkei closed -0.40%, SSE -0.19% and HSI +0.23%. STI swinging between positive and negative closed flat with a drop of 0.03% in a thin volume day with 12 of the 30 index stocks registered positive closing.

With the lacking of any positive catalyst to propel the market further up and concern of China slowing down and EU debt issue weighed on investors and that capped upside for the market for the time being. Though China economic data showing slowing down, analysts were anticipating China could loosen its monetary policy soon with possible of a 3rd RRR cut. That news if confirms will be good for China but rest of the world, yet to be seen. This week, US Fed will be holding FOMC meeting on 13th March and with expecting of maintaining low interest rate, investors were probably looking for cue of whether will Fed launching a QE3. Note that, US economy is recovering and if there is not requirement for a QE3 it is better not having one. Let the economy self recover if it is capable of doing that and do away with the life supporting system of QE3.

EU side, after the Greece saga, investors might be looking at Portugal and Spain next for the debt situation. Markets still in consolidating mode, doing range bound. Given the scenario that there will not be any unexpected extremely negative news/events, investors maintaining cautiously optimistic stand should accumulate on weakness and if possible doing the dollar-cost-averaging method.